SAA is enhancing its procurement and contracting controls following a judgment by a Special Tribunal, which deemed the company’s 2019 lease extension with Flyfofa Airways unlawful. Mphilo Dlamini, SAA’s Executive for Group Corporate Affairs, indicated that future fleet acquisition will involve stricter evaluations and compliance measures. Key improvements include a new contract-management system, enhanced vendor controls, and the establishment of an Internal Procurement Forum for oversight and risk management.
The Tribunal ruling found that SAA had ignored risks associated with Flyfofa when it extended the lease without proper approval, leading to payments made even when the leased aircraft were grounded. SAA paid R85.34 million under this lease, but the Tribunal stipulated that Flyfofa must account for profits derived from the deal.
Wayne Duvenage, CEO of OUTA, emphasized the need for accountability among those responsible for the decision, suggesting potential consequences under various legal frameworks. While SAA cannot comment on ongoing investigations, it has protocols in place for addressing irregular expenditures.
Despite recently receiving approval to seek a strategic equity partner, ongoing litigation related to past procurement issues may hinder this effort, as potential investors typically shy away from entities with legal complications.
